On-Line Quiz

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Recall the discussion in your textbook about the demand curve for oil. Which of the following correctly explains why the
demand curve for oil is negatively sloped?

When the price of oil rises, consumers use oil for more and varied purposes.
As the price of oil rises, consumers begin to use oil only for those purposes where no
good substitutes exist for oil.
As the price of oil rises, consumers use oil more freely.
As the price of oil rises, more producers are able to produce oil.

Which of the following statements about consumer surplus is incorrect?

Consumer surplus is the net benefit to consumers (that is net of what is paid for
the good) from
the exchange that occurs in a market.
Consumer surplus is the difference between the maximum price the consumer is willing
to pay
and the market price.
Total consumer surplus is the area beneath the demand curve and above the market price.
Consumer surplus is the difference between the minimum price the consumer is willing
to pay and
the market price.

Which of the following are factors that shift the demand curve?

costs of production, price of the product, and subsidies
income, population, tastes, and input prices
expectations, opportunity costs, price of the product
price of substitutes, tastes, price of complements

Which of the following answer choices contains only factors that would cause a demand curve for a normal good to
shift to the right?

a rise in population, economic growth, a fall in the price of a substitute good
There will be an increase in the demand for goods targeted towards young people,
as this group
will increase their demand to offset the demand of the growing
positive expectations for the economy, economic growth, a fall in the price of
a complementary
good
a fall in population, economic growth, a rise in tastes and preferences for
the product

Which of the following might happen as a result of an overall aging of the population?

There will be an increase in the demand for healthcare.
There will be an increase in the demand for goods targeted towards young people,
as this group
will increase their demand to offset the demand of the growing elderly.
The demand for prescription drugs will become more horizontal.
The aging of the population will not shift the demand for any goods; it will only
move us along
certain demand curves.

Suppose the administration at a local university decides to double the school's enrollment over the next five years
in attempts to increase tuition revenue. Which of the following would most likely occur in the market for rental housing
in the surrounding community?

a decrease in the price of rental housing
an increase in the demand for rental housing
a decrease in the supply of rental housing
no change in the demand for rental housing, as a change in the population leads
to a change in
quantity demanded, not demand

Computers and printers are complements in consumption. If the price of computers ___________, then the demand
for printers will ________________.

Recall the discussion in your textbook about the supply curve for oil. What explains why the supply curve for oil
is positively sloped?

As the price of oil rises, producers' costs of drilling oil also rise.
As more and more producers enter the market, the price of oil rises.
As the price of oil rises, consumers buy less and less oil.
As the price of oil rises, more producers enter the market.

Which of the following answer choices contains only factors that cause the supply curve to shift to the right?

a fall in production costs, a rise in technology, an increase in taxes on output
a fall in tastes and preferences for the product, economic growth, and a rise in
technology
a decrease in taxes on production, a fall in subsidies on production, a rise
in costs of production
a rise in technology, a fall in the costs of production, a fall in taxes on output

Recall your reading on NAFTA from the textbook. Why did the NAFTA agreement result in an increase in lumber supply
in the United States?

NAFTA decreed that the United States should produce more lumber.
NAFTA stands for North American Furniture Trade Agreement.
NAFTA reduced barriers to trade, allowing Canadian lumber to enter the United States.
The United States sold more lumber to Canada.